3 Warning Signs That Bitcoin’s Rise Is Exceeding Its Limit
Bitcoin (BTC) faced fresh doubts about the strength of its bullish rally on October 7 as analysts looked for a possible reversal of short-term pressure on Wednesday.
Funding rates in the red
The previous day saw a sudden rise to highs of $55,700 for bitcoin, which accompanied significant buying pressure.
With funding rates turning positive across exchanges, concerns on Thursday centered on what could end up being an adverse move lower.
Funding rates that turned overly positive indicate that the market is expecting more upside and that the big value is buying Bitcoin. Under these conditions, a collective retreat from positions can accelerate and intensify a downward move, if initiated.
The mood among investors was echoed by sentiment data, with Fear and Greed Index in Cryptography Hit 76/100 a day, which represents “extreme greed”.
“Investors are very greedy for BTC right now,” Trader and Analyst Rekt Capital warned.
Preparing to take profits
While below $10,000 from all-time highs, Bitcoin is also facing significant resistance levels at $58,000, $60,000 and more on its way back to price discovery.
As Cointelegraph mentionedOctober is set to close slightly below the highs, while November could see a return to lower levels before the end of December erasing current records.
However, long-time market participants are already recommending an exit strategy for this week, and among them is John Bollinger, the creator of the popular Bollinger Bands trading indicator.
The second goal has been achieved. $ BTCUSD. UpperBB expands with height. Keep tracking stops like BBstop or Chandelier. Everything is clear for now, but start looking for top/exit signs. I will be traveling for two weeks. Good trading! # bitcoin
– John Bollinger (bands) October 5, 2021
Bollinger Bands track the ups and downs of the asset’s volatility and currently indicate that calmer conditions should prevail. However, when the bands narrow, volatility follows.
Meanwhile, Altcoins are not expected to post final cycle gains until next year.